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Pound Sterling Rates Today - GBP AUD & GBP USD Exchange Rate Forecast Lower

July 22, 2014 - Written by John Cameron

The world’s premier currency pair slumped to its lowest level since the end of last year following the publication of a hotly-anticipated set of US inflation figures earlier on.

The euro US Dollar exchange rate (EUR/USD) plunged downwards during this afternoon’s session, touching an intraday low of 1.3459 a short time ago. In the end, this afternoon’s American Consumer Price Index inflation numbers showed much as per expectations, revealing that the rate of US price rises had held steady at 2.1% last month. Investors took the figure as a sign that the vast American economy has convincingly rejected a potentially detrimental bout of falling prices.

However, a quick look at the Pound Sterling to euro exchange rate (GBP/EUR) provides corroboration that the move southwards for EUR/USD was not solely driven by Dollar strength. The GBP EUR exchange rate has pushed higher to touch 1.2671 a short time ago as the single currency came under sustained selling pressure. Greg Anderson of the Bank of Montreal described the single currency as being, ‘a tiny bit soft in the core’. He went on to explain that the move for GBP EUR was, ‘not a data response -- that is a market that’s looking to sell euro’.
Elsewhere, in an unusual development, the Australian Dollar (currency:AUD) was one of the best-performing of the sixteen most-actively traded global currencies on the session following overnight comments from Reserve Bank of Australia Governor Glenn Stevens. The RBA Chief used a setpiece speech in Sydney to confirm that he was content with the relative value against the Aussie. This was a significant turnaround from Stevens’ comments of earlier in the month when he bemoaned the fact that the local unit was ‘overvalued’.

The move sent the Pound Sterling Australian Dollar exchange rate down to a short-term low of 1.8116 GBP/AUD. The pair now appears in danger of sliding back down into the 1.7000s sooner rather than later. Tonight’s domestic Consumer Prices Index data for Q2 represent the next risk event of note for the Aussie. Analysts are expecting an increase from Q1’s counterpart showing of 2.9%, up to 3.0%. If this comes to pass, then it appears likely that calls on Australia’s central bank to countenance an increase to its key lending rate will increase in volume.

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